Photo courtesy of Cottonbro of PEXELS

June 1, 2021

The cost of not having travel insurance

Travelling cheaply means cutting costs wherever possible, but insurance should never be on the chopping block

By: Dana Hall

Five years ago, I went backpacking in South America and sprained my ankle on a three-day hike around Ecuador’s Quilotoa Loop. A few days later, I had $2,000 worth of possessions stolen from me. Everything from my iPad to bank cards to my running shoes had been emptied from my bags, and I suddenly found myself stranded abroad with a severe limp and no money. 

The people I’d befriended at my hostel in Quito were able to help by lending me money while I waited for my bank to send a new debit card. This took about a week, during which time I rested my ankle and it began to heal—a process that would take eight months in total. I made peace with my lost possessions and continued on with my trip, but my experience highlighted a glaring error in my travel planning. In my attempts to travel as cheaply as possible, I’d neglected to buy travel insurance. 

Having travel insurance wouldn’t have prevented my injury or the theft, but it would have made those few days much less stressful. I would have gone to see a doctor about my ankle and would have received the proper attention to ensure it would heal properly. Insurance also would have covered some of the financial compensation for the items that were taken from me. 

Not wanting to spend the money to insure my trip cost me in the end, but the truth is I got off lucky. If an accident had occurred that required serious medical attention, if my ankle was a break instead of a sprain, I would have put myself at risk to pay thousands of dollars out of pocket. 

Travel insurance is a relatively cheap investment and is an essential purchase for anyone headed on holiday. I will never travel uninsured again, and neither should you. 

 

What to look for

Travel insurance provides financial security for incidents that commonly happen abroad. When searching for a plan that suits your needs, the Government of Canada recommends any traveller look for the following with their insurance plan:

 

  1. Medical evacuation 
    • This covers you if you need to travel back to Canada due to a medical emergency or if you require transport, including airlift, to the nearest hospital that can provide you with appropriate medical care.
  2. Pre-existing medical conditions 
    • Ensure you are aware of your policy’s limitations of pre-existing conditions. Companies will insure pre-existing conditions in certain instances but it’s vital to contact your provider and ensure your personal circumstances will be covered. Get any agreement to cover a pre-existing condition in writing to avoid trouble if you need to submit a claim.
  3. Repatriation to Canada
    • This isn’t something anyone wants to think about, but should you lose your life overseas, it is important that your body gets back home. Repatriation will cover these expenses.

In addition to these recommendations, an insurance plan that covers lost or stolen items will be helpful. Should you lose a valuable item, you’ll be reimbursed to buy a replacement. The same goes for plans that cover lost or damaged baggage. This aspect of insurance isn’t a matter of life and death, but it is something to consider given the cost for this type of coverage is relatively low. 

 

Premiums and deductibles

A premium is the money you pay upfront to purchase a travel insurance plan and a deductible is the amount of money you’re required to pay before that insurance plan kicks in. In simple terms, if you incur a $1,000 medical cost while travelling and have a $100 deductible on your plan, your insurance will cover $900.

Many insurance companies offer higher deductibles in exchange for slightly cheaper premiums, so if you’re willing to pay a portion of potential fees accumulated abroad, the overall cost of your insurance plan will be cheaper. The trade-off is that if you purchase a plan with a deductible and nothing goes wrong, you’ll have saved a little bit of money.

 

Submitting a claim

Insurance will reimburse you for costs that have been incurred, but sometimes you’ll need to pay upfront, depending on your policy. Should you receive medical attention abroad, keep every receipt and make copies if possible. Insurance companies will require evidence of any expenses, so save as much information as you can to help ensure a full reimbursement. 

Get familiar with your company’s claim policy. Many insurance providers require their users to submit a claim within a certain number of days following an incident, so it is important to get in touch as soon as possible. They will also be able to offer you guidance on formally submitting a claim.

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